Congressmen ask ad companies to pretend SOPA is law, break anti-trust

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A murder of Congresscritters and Senators have told Internet ad-brokers that they expect them to behave as though SOPA passed into law (instead of suffering hideous, total defeat); they want the companies to establish a secret, unaccountable blacklist of "pirate" sites. The group comprises Congressmen Bob Goodlatte and Adam Schiff, and Senators Sheldon Whitehouse and Orrin Hatch. This isn't just a terrible idea, it's also an obviously illegal antitrust violation, as Mitch Stoltz from the Electronic Frontier Foundation points out:

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Letting commercial companies with their own competitive motivations decide which sites are "rogue" or "pirate" sites is a recipe for abuse. It means that site owners who comply with copyright law could still have their sources of revenue cut off when a company who might be a competitor asks for it. The legislators' letter doesn't define "online piracy sites," but most of the definitions we've seen lately focus on the number of takedown requests a site has received from copyright holders, or the number of requests sent to search engines about the site. Since just a few companies send out a large portion of the takedown requests, those companies would effectively have the power to control who gets deemed a "piracy site."

As a federal law, this scheme would have created serious First Amendment and due process problems. As a private agreement among competing ad networks, it could raise other legal problems. Under the Sherman Antitrust Act, companies that compete with each other aren't allowed to make a pact amongst themselves about who they will refuse to do business with, especially if the purpose of the pact is to squelch competition or punish a rival. It's called a "group boycott" or "concerted refusal to deal," and it can lead to big-money lawsuits and years of trouble. In some cases, groups of competitors sharing a list of companies that they deem to be bad actors, with a wink-wink understanding that no one in the group should do business with those companies, was deemed a violation of the Sherman Act1.

Claiming that an industry-wide refusal to deal is justified by "fighting piracy" doesn't necessarily avoid an antitrust jam. In 2003, the Motion Picture Association of America decided that its members, major movie studios who compete with one another, would no longer send pre-release "screener" copies of films to members of awards committees like the Motion Picture Academy. According to the MPAA, the group boycott of awards committees was needed to stop infringement of pre-release movies. But the group ban put smaller studios at a huge disadvantage in getting award nominations and votes. In just two months, a court decided that the MPAA's screener ban was likely illegal, and that loss may have precipitated MPAA head Jack Valenti's retirement a few months later.

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